Loan Process: Breaking It Down

Mortgage Terms to Know

During the home-buying process, you may hear some unfamiliar terms. Let us explain some of the language you should know in order to be fully prepared to buy your dream home:

Conventional Loans are private mortgages not backed by the government, requiring steady income and good credit.

FHA Loans are insured by the Federal Housing Administration and require low down payments. Learn more about FHA Home Loans here:

VA Loans are guaranteed by the Veterans Administration and are only available to veterans and current members of the military. Lear more about VA Home Loans here:

Private Mortgage Insurance is often required when you make a down payment of less than 20%.

Homeowner’s Insurance, which is commonly required to obtain a mortgage, insures your home (including its contents) and provides financial protection against disasters.

Home Warranty is a basic coverage over various things that might go wrong in your home.

Closing Costs are fees paid at the end of the home-buying transaction.

Pre-Qualification occurs when you meet the general lending guidelines for receiving a loan and obtain an approximate number of how much you can borrow.

Pre-Approval is obtained after an underwriter reviews your credit history, income, assets, and debt to determine how much money you qualify for, allowing you to make an offer immediately.

Title Insurance protects you and the lender from the lack of a free-and-clear title when the property is sold.

Escrow is generally paid monthly, and goes towards property taxes and insurance that you would otherwise pay once or twice a year.

Prepayment Penalties are occasionally administered for repaying your debts early.

Cosigners agree to be legally obligated to make your mortgage payments if you do not.

Amortization Schedule is a table showing your payments, principal, and interest.

Appraisals are an examination of the property to determine its true monetary value.

Contact us today to get started on your home loan. Give us a call at 303-740-8300 or visit us here:

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Security First Financial is a division of Primary Residential Mortgage, Inc. PRMI NMLS 3094. Branch NMLS ID# 385589. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. Programs, rates, terms, and conditions are subject to change and are subject to borrower(s) qualification. This is not a commitment to lend. Colorado – Regulated by the Division of Real Estate, UCCC #987701-016. Arizona – Arizona Department of Financial Institutions 0902614. Massachusetts – Licensed by the Massachusetts Division of Banks as a Broker and Lender as #MC3094. Florida - Florida Office of Financial Regulation MLD646. Texas - This office is licensed and examined by the Office of Consumer Credit Commissioner of the State of Texas. 

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Consumers wishing to file a complaint against a mortgage banker or licensed mortgage banker residential loan originator should complete and send a complaint form to the TX department of savings and mortgage lending, 2601 North Lamar Suite 201, Austin, Texas 78705. Complaint forms and instructions may be obtained from the department’s website at A toll-free consumer hotline is available at 1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed mortgage banker residential mortgage loan originators. A written application for reimbursement from the recovery find must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at


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